No slowdown in China as tech investments double in past 12 months

China’s economic slowdown has not dulled investor enthusiasm for the country’s tech companies, new data shows.

Investors ploughed US$14.5 billion into Chinese tech startups and firms of all sizes in the first three months of the year, according to the Tech in Asia database. That’s a little over double the tally in the same period last year.

The number of deals has not risen so much from Q1 2015 to Q1 2016 despite the doubling in cash, indicating that the average funding amount is rocketing. A total of 353 disclosed investments occurred from January to March, compared with 308 in the same period the year prior.

Turbulent year

While the Q1 funding total was a little down on a peak of US$16.5 billion in Q3 2015, the money is still pouring into tech firms across the nation despite China’s slowing growth in manufacturing activity.

Series D and E rounds fell off a cliff.

The investors are venture capitalists as well as China’s own major tech players, which are increasingly backing homegrown startups.

A major trend seen in the past year is investors shifting to earlier stage rounds, particularly seed, series A, and series B, the Tech in Asia database of investments shows. The amount of cash given at series A more than quadrupled from Q1 2015 to Q1 2016, while series B rose six-fold. Series C funding grew only slightly. In stark contrast, series D and E rounds fell off a cliff in the past 12 months.

Many experts have been warning of a “winter” of scarce cash for startups, but the only evidence of that so far in China is in drastically reduced sums given to startups at series D or series E rounds.

By that later stage, China’s tech startups now need to be self-sufficient with profits or heading to an IPO. Or they’ll be in the deadpool – just like the once promising cross-border ecommerce startup that recently collapsed.

Uber confident